On Monday, oil prices went down on supply glut concerns as OPEC+ is scheduled to ease its oil production cuts. The resurgence in coronavirus cases globally also weighed down on oil prices as market players foresaw a slower recovery in fuel demand.
As of 00.01 GMT, Brent crude oil futures slipped by 0.2% or 8 cents to USD43.44/barrel while the US WTI crude futures edged down by 0.3% or 12 cents to USD40.15/barrel.
When welcoming August, Brent posted a fourth month of increases in July while US WTI recorded the third month of rising after both slumped in April due to the coronavirus pandemic.
The Organization of the Petroleum Exporting Countries and its non-member oil producer allies (OPEC+) is scheduled to ease its crude oil output cuts starting from August 1, adding 1.5 million bpd to the global production.
Analyst Hiroyuki Kikukawa of Nissan Securities opined that investors are concerned about the possibility of an oil supply glut coming from OPEC+ and US shale producers who have started to recover their lost outputs as oil prices have recovered from the lows.
Other than that, concerns regarding oil demand are also pushed up by the resurgence in coronavirus cases globally, which have already prompted several governments to reimpose economic restrictions.
Looking ahead, a Reuters poll estimated that in 2020, oil prices would face a slow upgrade as the gradual uplifts of coronavirus-led restriction provide supports for demand, but the possibility of a second coronavirus wave could slow the recovery pace.
This week, the Australian state of Victoria declared a state of disaster, and authorities in the Philippines will impose new restrictions in Manila. These facts reflect the global worries regarding the resurgence of the pandemic.
